Greater protection for consumer and small business bank deposits

The bank deposits of consumers and small businesses will be better protected should their banks fail after MEPs voted in favour of improvements in the coverage of deposits.

The initial proposals from the commission increased the guarantees from €20,000 to €50,000, but MEPs have raised this even further to €100,000 by December. Additionally, in the event of a bank failing, the new legislation will require that all funds are now repaid within 14 days as opposed to 3 months under the previous system.

MEPs also voted to add small businesses to the deposit guarantee scheme as they were not included in the initial proposals.

Speaking after the vote, Sir Robert Atkins said:

“Enhancing guarantees for bank deposits is crucial in returning consumer confidence to the banking sector. People who have saved for their entire lives should not lose their nest eggs because of the failure of regulation and the banks.

“We have voted to add small businesses to the guarantee scheme. Many would have been completely exposed by bank failures and we must ensure they are safeguarded.”

At Old Trafford, presenting a cheque for £100,000 to the Chairman of Lancashire C.C.C.